When sending money from India to another country, you must be aware of several government restrictions and foreign exchange rules. These restrictions apply to all international money transfers, and there are a few things to keep in mind to make sure you receive your money’s worth.
Fortunately, there are foreign exchange businesses that simplify the process, allowing you to send money across borders in a matter of minutes. Whether you’re sending money home as a gift to friends and family, paying for medical expenditures, or paying tuition fees to university abroad, specialised international money transfer firms can offer you a better rate than your bank.
What’s the best way to remit money overseas from India?
There are numerous ways to send money overseas from India, each with their own set of benefits and drawbacks. Your options include:
Banks like HDFC Bank, State Bank of India, ICICI Bank, and other financial entities are the most common means to move funds. Payments can be made online, by phone, or over the counter. Aside from the assortment of fees, banks also impose a markup on the exchange rate, which may not be the most cost-effective option available.
2. Digital money transfer services or remittance platforms
An online currency transfer provider is likely to be the cheapest way to move money internationally, especially if you are sending large sums of money. These are mainly online businesses with a website or app where you can perform various transactions such as Instarem or Wise. More often than not, these are more cost effective options.
Aside from being the most affordable, the end-to-end process is usually a pleasant user experience with an intuitive app or website. Costs and conversion rates are clearly displayed, so you know precisely how much money you are sending, and how much your recipient will receive.
3. Cash transfers
You can make international transfers in cash with money transfer services like Western Union and Moneygram. Unlike bank transfers, you or your recipient don’t need a bank account to send or receive money. A cash transfer is, however, a more expensive option compared to bank transfers or digital money remittance services.
Comparing remittance services in India
When comparing the cheapest ways to send money abroad, examine your options all at once, rather than dragging it over a few days. This is because currency exchange rates fluctuate frequently, and so the amount you’re estimated to receive will fluctuate as well. Essentially, you want to ensure that you’re comparing businesses on comparable terms, such as those in our comparison table below.
How to get the most out of your money transfer overseas?
There is no straightforward answer to what is the best and most affordable way to send money internationally because it varies depending on your situation. You can, however, make the most out of your money by considering these factors for your available options:
- Exchange rates
Exchange rates have a significant impact on the amount of money you receive at the other end, particularly for larger transfers. The foreign exchange market is extremely volatile and exchange rate prices can fluctuate by the second. As a result, the timing of your transfer is also critical. There are numerous online tools that can assist you in obtaining the best exchange rate.
- Transfer fees
Fees for money transfers vary significantly between companies. Some either charge no fees, a fixed price, or a portion of your transfer. Thus, an enticing exchange rate doesn’t necessarily guarantee that you will receive more money. For instance, a forex supplier may charge no transfer fee yet offer a lower exchange rate. Others may advertise extremely favorable exchange rates while also charging hefty transfer fees.
- Transfer limits
Individuals can send a maximum of $250,000 abroad each year under the Reserve Bank of India’s liberalized remittances scheme.
This changes according to supplier and currency. Certain providers charge various costs based on the payment method used, which has an effect on how quickly the money reaches its intended recipient. Therefore, while comparing fees, you must also consider the timeframe required.
- Transfer methods
Having additional payment choices is helpful, as not everyone has an online bank account, and not everyone carries large amounts of cash. Majority of the remittance firms accept debit cards, while some accept credit cards.
- Collection options
Sending money is one thing, your recipient should be able to receive the funds too. That is, you must also consider your recipient’s options to receive the funds, such as whether they can collect at a bank or money transfer center.
What should you watch out for?
There are numerous considerations to keep in mind when sending money overseas. The process becomes clearer as you weigh the pros and cons of your various money transfer options, while keeping an eye out for:
- Hidden fees
Keep an eye out for hidden costs that banks and most services add on to the conversion rate without advertising to clients in a clear and concise manner.
- Fake rates
Before each transaction, search for the mid-market rate, often known as the inter-bank rate on the internet using Google. This is the actual exchange rate at which banks use to send money to one another.
Wherever money is involved, scammers are waiting to get a piece of the pie. One way to ensure you never become a victim is to avoid sending money to someone you don’t know or have never met in person. If you must do so, use a safe and reliable money transfer provider, and avoid sending large sums all at once.
- Taxes and regulation
Familiarize yourself with the laws and regulations of both the country from which you are sending and the country of your recipient to ensure a smooth transaction. It is possible that your receiver will be unable to withdraw their funds due to regulatory violations such as a lack of proper identification, or that the transaction may be labelled as suspicious if you do not adhere to certain money laundering rules.Additionally, the money sent may be taxed. As such, always verify the acceptable limits and that your beneficiary possesses the relevant paperwork to collect the funds.
Sending money overseas shouldn’t be a hassle, and it certainly shouldn’t cost a fortune. A little research and forethought may go a long way when it comes to deciding the best approach to do so. You’ll have to consider them against your needs, such as swiftness or a low fee, as well as the amount of money you need to transfer and where it needs to go. You can get the best rates, lowest fees, and flexible or speedy delivery if you take the time to compare and choose the perfect service that matches your needs.
An alternative way to sending money overseas: Instarem
As demonstrated by the comparison chart above, Instarem seems to have a slight advantage. Instarem is well-known for providing low-cost digital cross-border money transfer services to consumers and businesses, utilizing close to mid-market rates to maximize your money’s value, and a great way to send money to loved ones as gifts. Instarem’s quick turn-around times are also great for emergency transactions, or when you just need your funds to get where they need to be swiftly.
Additionally, Instarem rewards regular customers with a great loyalty program where you can earn InstaPoints when you sign up and start making transactions or successfully referring your friends to explore Instarem.
See how Instarem works and find out for yourself.
Disclaimer: This article is intended for informational purposes only. All details are accurate at the time of publishing. Instarem has no affiliation or relationship with products or vendors mentioned.